Practice Quiz Chapter 06

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. A chemical recovery system costs $25,000 and saves $5,280 each year of its 6 year life. The salvage value is estimated at $6,500. The MARR is 10%. What is the net annual benefit or cost of purchasing of the chemical recovery system?

a) $4544.9 correct incorrect

b) $4655.2 correct incorrect

c) $4897.6 correct incorrect

d) $4779.1 correct incorrect

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. Suppose you are in the market for a new car worth $17,000. You want to make a $1,700 down payment now and take an auto loan from a bank at 11% compounded monthly. What would be your monthly payment to pay off the loan in 5 years?

a) $444.345 correct incorrect

b) $347.553 correct incorrect

c) $789.456 correct incorrect

d) $332.585 correct incorrect

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. Hailey wants to buy a used car priced at $11,000. She is able to make a $1,500 down payment. The rest will be borrowed from her line of credit at an interest rate of 7.5% compounded daily .The loan should be paid in 36 equal payments. What is her monthly payment? What is the total amount of interest Hailey has to pay over the life of the loan?

a) $214.76 and $1231.2 correct incorrect

b) $195.5 and $897.7 correct incorrect

c) $295.15 and $1125.4 correct incorrect

d) $315.34 and $1100.2 correct incorrect

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. Please see the PDF attachment to answer this question. Consider the following cash flow diagram. What is the equivalent annual worth at i=8%?

a) $1708.47 correct incorrect

b) $2134.55 correct incorrect

c) $-1708.47 (P.180-81) correct incorrect

d) $-2134.55 correct incorrect

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. Please see the PDF attachment to answer this question. Which project should be adopted given the opportunity cost of capital is 10%?

a) Project X correct incorrect

b) Project Y correct incorrect

c) Both of them have the same cost correct incorrect

d) Both of them have different cost correct incorrect

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. Mr. Bean has borrowed $180,000 at annual interest rate of 7.5% and promised to pay 10 equal annual payments beginning one year from now. How much is the annual payment?

a) $13,500 correct incorrect

b) $16,200 correct incorrect

c) $18,624 correct incorrect

d) $26,224 correct incorrect

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. Mobile Tech Ltd has just borrowed a business loan of $100,000. The loan has an annual interest rate of 5% and will be paid monthly for 5 years. What is the balance at the end of the second year?

a) $37,034.81 correct incorrect

b) $45,290.96 correct incorrect

c) $54,709.04 correct incorrect

d) $62,965.19 correct incorrect

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. Mobile Tech Ltd has just borrowed a business loan of $100,000. The loan has an annual interest rate of 5% and will be paid monthly for 5 years. What is the principal payment at the end of the third year?

a) $1,470.46 correct incorrect

b) $1,539.27 correct incorrect

c) $1,618.03 correct incorrect

d) $1,700.81 correct incorrect

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. Mobile Tech Ltd has just borrowed a business loan of $100,000. The loan has an annual interest rate of 5% and will be paid monthly for 5 years. What is the total interest payments paid?

a) $13,227 correct incorrect

b) $18,527 correct incorrect

c) $20,871 correct incorrect

d) $25,000 correct incorrect

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. Mobile Tech Ltd has just borrowed a business loan of $100,000. The loan has an annual interest rate of 5% and will be paid monthly for 5 years. What is the total principal payments paid at the end of the fourth year?

a) $18,445.88 correct incorrect

b) $22,043.91 correct incorrect

c) $77,956.09 correct incorrect

d) $81,554.12 correct incorrect